Jack’s – the next big Tesco move?
This week it has emerged that Tesco is likely to be making a move to challenge Aldi and Lidl by launching its own discount stores – there have been job adverts for roles at a new Tesco venture and it has trademarked the name Jack’s – a reference to Tesco’s founder. If it does turn out to be true, this is a bold move from Tesco, that may or may not pay off.
The trouble for Tesco is that they will need to tread a fine line with Jack’s to make it successful. The first problem to overcome is to make sure they don’t cannibalise their own business, stealing share from the discounters and not from the main Tesco business. By opening another discounter, you are giving customers another place to shop other than Tesco, which could easily result in shoppers from Tesco heading to Jack’s instead and thus probably reducing their overall spend with the Tesco business. However, if they can convince people that currently shop mainly at Lidl and Aldi, or who shop at one of those shops and a supermarket, to go to Jack’s instead, they could be on to a winner.
However, convincing someone to start shopping somewhere else is easier said than done. We are all creatures of habit, especially when it comes to doing our regular weekly shop. You have to provide a compelling reason to switch – for me to travel the extra two minutes to go somewhere else or to break the habit of going to my usual supermarket where I know where everything is, so the shopping experience is really easy. Jack’s is going to have to offer a good reason to go there – a fundamentally better experience – whether that’s cheaper prices, better service, or something else. If I’m used to going to Lidl or Aldi, why should I switch to Jack’s?
Jack’s and Tesco need to be kept separate as brands, with different offerings. If they remain too close, why would you got to Tesco when you can get the same (or very similar) products at Jack’s for cheaper. While people knowing Tesco is behind Jack’s may be beneficial for the new business, as it will probably make them more trusted then a completely new entrant to the market, the association shouldn’t be allowed to grow beyond that, or the main Tesco brand could loose out.
Launching Jack’s is a big step for Tesco. It could pay off big time if they can convince the right shoppers to switch, but they will be walking a tightrope which they could, quite easily, fall off. What does it mean for brands? Well, until we see what the Jack’s offering is, it will be hard to know. We could see more brands ending up in discounters as Tesco pushes brands that it stocks to also appear in Jack’s. Tesco could end up with an even more dominant position in the grocery market, or Jack’s could be a short-lived experiment that does not affect brands much at all. Watch this space.
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Coca-Cola & Merlin: Reverse Vending Machines
Coca-Cola are rewarding recyclers with a voucher for a cheaper day out at a Merlin attraction. They are launching a trial scheme which will run from 25 July to 19 October at Alton Towers, Thorpe Park, Chessington World of Adventures and Legoland Windsor. At each attraction there will be a reverse vending machine, which will give you a voucher for 50% off entry at 30 Merlin attractions in exchange for any 500ml plastic bottle – which could be up to a £30 saving.
Ikea is heading to the high street
As other retailers are exiting the high streets up and down the country, Ikea is bucking the trend and opening its first high street store. The retailer is launching more smaller format stores to capture more of the click & collect market and make it more convenient for people to get their Ikea fix.